In case you missed them, here are several trading ideas published earlier on TheStreet.com:
Why Two Cybersecurity Stocks Are Suddenly a Big Deal Hours Before They Report
Jul 26, 2017
Coffee Stocks Are Getting Cold
Technical condition tenuous for Dunkin’ and Starbucks, both of which report this week.
Jul 24, 2017
Amazon Shares Could Easily Nosedive Back Under $1,000: The top may be in.
Jul 21, 2017
T-Mobile US (TMUS) reported blow-out quarterly numbers after the market close Wednesday and the stock gapped higher Thursday morning, taking out a key level of technical resistance. Shares quickly reversed direction, erasing the 3% gain as some investors who were long going into the earnings report took profits. Nothing has changed regarding the positive fundamentals or the bullish technical picture and the move back below the initial breakout level allows those who missed the move to enter at pre-report levels.
The price action ahead of earnings formed a cup-and-handle pattern on the daily chart above this month’s retest of the rising 200-day moving average and below rim line resistance at the 50% retracement level of the May high and the July low. This morning’s gap up through the pattern rim line retested the declining 50-day moving average and the 38% retracement level of the May high and June low. This was a logical place for a pullback and potentially a retest of the rim line over time. That is what happened but it is a little concerning when it happens in the first 30 minutes of trading. At this point in the session, the stock has penetrated below the $62 resistance-turned-support level.
Moving average convergence/divergence made a bullish crossover as the cup-and-handle pattern was forming, the relative strength index crossed above its 21 period average and both have continued to track higher. Overall volume has picked up over the last several sessions and the Chaikin oscillator, a moving average of three and 10-period Chaikin money flow, has crossed above its signal and center lines.
At this point in time, the stock needs to continue its somewhat unexpected pullback process, and shake-off whatever pressures it is experiencing. The trading strategy is clear, however, and that is to enter long after an upper candle close above $62 cup-and-handle rim line. A pattern price objective for the cup-and-handle is measured by taking the depth of the cup and adding it to the rim line and it targets the $65 area. That would take it back through the 38% retracement level and the 50-day moving average it touched this morning, just use a position size that allows for volatility.
(This article appeared on TheStreet.com earlier.)
T-Mobile US (TMUS) reports earnings after the close Tuesday and the technical pattern on the daily chart suggests the stock is ready to move higher. Shares had been in a steady uptrend for the last six months, tracking above their rising 50-day moving average. Last month, though, the average and the trend line were broken to the downside. The stock quickly dropped back to its 200-day moving average, which was intersecting with the 38% Fibonacci retracement level of its August 2016 low and May 2017 high.
It has been able to hold in this area and in the process form a bullish cup-and-handle pattern, with rim line resistance in the $62.00 area. The cup-and-handle formation consists of a small rounded base or cup that is followed by a retest of previous support-turned-resistance or the rim line. This test is met with some selling pressure and a higher low is made, before another run at the rim line, which forms the handle. The pattern projects an upside price target measured by taking the depth of the cup and adding it to the rim line. In this case, that would be about a 6% advance, which takes stock back above its 50-day moving average, and initial breakdown point in the $65.00 area.
The stochastic oscillator has moved out of an oversold condition and above its center line, and moving average convergence/divergence made a bullish crossover. These indications reflect an early shift in price momentum and short-term trend direction. Overall volume has picked up over the last several sessions and Chaikin money flow is above its signal average and center line. These readings suggest the stock is seeing some buying interest in its current level.
The recent bullish action on the chart suggests T-Mobile is prepared to move higher and a break above the $62.50 level would be a long entry point. If, on the other hand, the report disappoints, there is a well-defined area of support just above the $59.00 level that, if breached, makes the stock an intermediate-term short-sale candidate.
T-Mobile’s shares rose 1% to $62 by Wednesday’s close.
(This article was published on Thestreet.com yesterday morning. There will be a follow-up article on TMUS later today.)
More bad news for Chipotle Mexican Grill (CMG) yesterday and it took the stock price down sharply, but it was headed towards $360 anyway, it just got there a little faster. Hopefully, for investors it can hold this level.
This article was published on TheStreet.com this morning:
All That Rises Is Not Tech: Top Takeaways From Jim Cramer’s ‘Off the Charts’
Tom Bemis of TheStreet.com Jul 19, 2017 6:30 AM EDT
Technology stocks get a lot of the credit for the market’s surge this year, but they’re not the only ones pacing gains, Jim Cramer told viewers on his Mad Money program. To get a better sense of which other stocks are doing well, Cramer went Off the Charts with Bob Moreno, the publisher of RightViewTrading.com and a contributor to RealMoney.com.
Moreno started by looking at a chart of ExxonMobil (XOM) , a notable non-participant in this year’s rally.Exxon’s daily chart has been trading sideways for nearly six months in a pretty tight channel, not surprising considering that oil has been range bound as well. But Moreno’s also noticed that Exxon seems to have a six-week cycle, with the stock bottoming out, then testing its ceiling of resistance before pulling back to its lows again. He thinks Exxon now has a well-established bottom at around the $80 area, and it just made another cycle low at the beginning of this month, which could mean that it has some upside, at least for the next few weeks.
To get a sense of what’s going on in the materials space, Moreno looked at the daily chart of Potash (POT) a specialty chemical play that normally trades closely with the energy space. Potash traded sideways for a good part of the year. But it recently broke out above its long-term ceiling of resistance and Moreno now thinks it could have a lot more room to run.
Healthcare
Healthcare stocks have been among the best performing groups this year and AbbVie (ABBV) is a good proxy for the sector, according to Moreno. The stock’s pattern is to trade sideways for a while, then rally sharply followed by another period of sideways consolidation. Last week the stock re-tested the low end of its recent channel, before bouncing back hard. Moreno thinks it’s only a matter of time before we get another breakout to the upside, because the stochastic oscillator, a tool that tells technicians when a stock has gotten overbought or oversold, recently made a bullish crossover, where the black line goes above the red one. At the same time, the Chaikin Money Flow oscillator, which measures the level of buying and selling pressure in a stock, is still in positive territory, suggesting that big investors continue to accumulate shares.
Consumer Discretionary
In the consumer discretionary space Priceline.com (PCLN) offers a barometer for discretionary spending, because few spending decisions are more discretionary than travel and leisure. Priceline’s stock is up 45% over the past year. In the last two months, Moreno notes that it’s been trading in a rising triangle pattern below the $1,920 level. Last week it broke out above that ceiling of resistance. Meanwhile, Priceline’s Relative Strength Index, an important momentum indictor, is tracking higher, and its accumulation/distribution line, a tool that tells you whether big institutional investors are buying or selling, is now trending above its rising signal average. Put it all together and Moreno thinks the stock is poised to resume its long-term uptrend.
Financials
Among financial stocks, Moreno focused on one of the stronger names in the space: Blackstone (BX) , the asset manager. Shares have been on fire. At the end of 2016, the stock’s short-term 50-day moving average crossed above its long-term 200-day moving average, what technicians call a golden cross because it’s such a reliably positive sign. Moreno notes that Blackstone just broke out above its recent consolidation channel, and if history’s any guide that could mean it’s now ready for another leg up. Meanwhile, the Moving Average Convergence Divergence or MACD indicator is making a bullish crossover. In addition, the Chaikin Money flow oscillator is moving higher and it’s out of negative territory. Moreno says Blackstone’s got a strong trend with a lot of technical indicators suggesting that the stock can keep gaining.
Industrials
Finally, within the industrials sector, Moreno looked at Honeywell (HON) , currently just shy of a new all-time high. Honeywell’s been rallying steadily for months. Moreno points out that the MACD is making a bullish crossover here, and the money flow index, which is a volume-weighted momentum indicator, has made a sharp move up, crossing above its center line, a sign that big institutions keep buying the stock. Moreno believes that Honeywell’s long-term trend will continue, as the rally in the stock keeps pace with its rising 50-day moving average.
Jim Cramer used the charts of technician Rob Moreno, publisher of RightViewTrading.com and Cramer’s colleague at RealMoney.com, to highlight some of the overlooked sectors’ top names on the “Off the Charts” segment of Mad Money.
International Business Machines (IBM) ended Tuesday at $151.11, down, $1.90 or 1.2%. And it could keep on falling.
The tech giant reported its 21st straight quarter of year-over-year revenue declines after the market closed, giving investors a case of the “Big Blues.” The company has been attempting to transition from its mainframe business model to other more competitive spaces, including cloud computing services, business analytics, and artificial intelligence applications.
It is a major shift away from its traditional enterprise business, and investors are getting impatient. It’s time for the new strategies to generate returns.
Shares rallied over 25% from their October 2016 low to their high in February of this year, briefly outperforming the Technology Select Sector SPDR ETF (XLK) in that time. A small triple-top formed in the $181 area, however, and the stock price began to retreat, first breaking through the trend line that delineated the October rally, and then breaking below a long-term trend line drawn off the February 2016 low.
Relative performance reversed sharply and the stock is currently lagging the broad technology sector by over 20%. The April gap lower in the stock price followed last quarter’s earnings disappointment and created a large vacuum between the $168 level and $161 level. There was a second down gap in May before the stock found a bottom and moved back up to close the smaller gap, and retest the downtrend line drawn off the February decline.
The narrow range price action over the past month has tightly compressed the Bollinger bands and periods of low volatility are often resolved by periods of high volatility. This means that another earnings disappointment or an earnings surprise could be followed by a volatile move in price.
The relative strength index has been oscillating around its center line, reflecting the lack of price momentum, and Chaikin money flow has also been unable to make a decision as to direction.
The trend has been lower for both the stock price and year-over-year revenue — the trend is your friend in this case. The declines could keep on coming.
The nearly-200% move in the metals and mining sector that began in early 2016, peaked in February of this year and has been followed by a period of consolidation. This constructive recovery process may be over and the sector may be preparing for the second rally phase.
The SPDR S&P Metals and Mining ETF (XME) highlights the pullback to the 61% Fibonacci retracement level of the September 2016 low and the high in February of this year, and the channel consolidation that followed above this level and below the 38% retracement level. Last week the fund broke above channel resistance at $30.75 and this level should now become a platform that supports a move higher.
There may be a better way to profit from a rally in the metals and mining space.
Freeport-McMoRan (FCX) has underperformed the XME by 12.5% over the last six months and it is currently breaking above channel resistance of its own. This could be the start of a catch-up move to the rest of sector.
The horizontal channel pattern on this chart is two-tiered — and today the stock is breaking out the lower portion, and retesting its flat 200-day moving average. Its daily moving average convergence/divergence is overlaid on a weekly histogram of the oscillator and is crossed above its mid-line on both timeframes. This signals positive price momentum and short-term trend direction. Chaikin money flow has been sitting at its center-line, but is back above it and its 21-period signal average.
FCX is a buy its current level, using an initial percentage stock below the $12.50 level. A break from the lower portion of the channel projects a break above the upper portion of the channel, and that could take the stock back to highs of the year.
Get ready to tweet out how much you netted on this trade.
Twitter (TWTR) shares are ready to break out of a triangle pattern that has been forming on the daily chart for the past two months. The pattern targets a 30% price objective into the $25 area, which would take the stock back up to its 2016 highs. There are some hurdles that must be overcome first, but the technical indicators say the stock is ready to run and the move could be swift.
Traders need to be prepared for the rally.
The stock successfully retested long-term support in April and then rallied to the 50% Fibonacci retracement level of its 52-week range. The brief test of the retracement level was followed by a pullback to the 50-day moving average and then a series of lower highs and higher lows, which formed the triangle pattern.
Last month the 50-day moving average made a “golden” crossover above the 200-day moving average, and moving average convergence/divergence and the vortex indicator both made bullish crossovers. These indications suggest positive price momentum and an early shift in trend direction. Chaikin money flow has moved above its centerline and continues to track in positive territory, supporting the breakout thesis.
Twitter was up over 3% on Tuesday, closing near the high of the session and on the triangle downtrend line. A break above this pattern resistance targets a price objective measured by taking the height of the triangle and adding it to the breakout level. This projects through the remaining Fibonacci levels and into a vacuum of resistance that was created by the sharp gap lower in September last year.
Twitter is a buy after an upper candle close that takes out triangle resistance at the $18.75 level, using a tight trailing percentage stop. The trade is speculative, but the technical framework is in place and the risk/reward ratio is large.
Just when it looked like the rally in the high yield bond market was nearing an end, Chair Yellen’s recent dovish tones may have come to the rescue. The weekly chart of the SPDR Barclays High Yield Bond ETF (JNK) shows the merging trend lines of a rising triangle nearing their apex. Last month the fund price began moving laterally and outside the support line, and last week’s large dark candle suggested it might be turning lower. That scenario is in question now. A break below $36.50 and the long-term trend is reversed but a new high and the rally resumes.